Kidnap & Ransom: a clear and present danger.

AuthorRyder, John
PositionRisk Management

Most dismiss kidnap as the stuff of thriller novels and Hollywood movies. Yet, each year, dozens of "ordinary" businessmen and businesswomen discover -- to their great personal and financial cost -- that this is far from the case. Kidnapping is rapidly becoming big business.

Worldwide incidents have reached an all-time high, at an estimated cost to the global economy of more than $500 million a year in ransoms alone. Since the majority of incidents go unreported, these figures can only be estimates. What is clear, is that the number of kidnappings increases each year, and is now thought by experts to be over 30,000 a year.

Colombia -- the current "hot spot" of the world -- accounts for 50 percent of the world's kidnaps. Other high-risk areas include the former USSR, the Philippines, Mexico, Nigeria, Ecuador and Brazil. However, over the last year, incidents have occurred in popular business destinations such as South Africa, Hong Kong and Bangladesh. Also, the U.S.-led war on terror increases the likelihood of politically motivated kidnaps.

The rise of "tiger kidnaps" poses a particular concern to the U.S. and Western European business communities. Named for the speed at which these events occur, tiger kidnappings involve coercing an employee into robbing his or her employer by holding their family hostage. While still fairly uncommon, these episodes can severely harm employees and employers, psychologically and financially.

The cost of kidnap

Kidnapping costs can range from a few hundred thousand dollars to several million dollars. In a recent case in Ecuador, kidnappers demanded an alleged $13 million ransom for the release of seven western oil executives working for a U.S. consultancy. Ransom costs -- coupled with the cost of security consultants, medical, travel, legal and accommodation expenses -- can have a profound financial impact. Moreover, corporations that mishandle an employee's abduction could face expensive litigation.

And, indeed, the consequences of kidnap are not confined to the financial realm. Even the most robust of employees may...

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